Britain wants future EU financial market access based on an “enhanced” or broader version of the bloc’s “equivalence” regime, which grants access to countries with regulations determined by Brussels to be sufficiently aligned with EU rules.

The system is used by banks in the United States, Singapore and Japan to offer some services directly to clients in the EU without the need for a costly subsidiary on the ground.

But it does not cover some common banking activities, such as lending and asset management, which Britain and its financial sector want to be able to carry out after Brexit.

Levin Holle, director general of financial markets policy in Germany’s finance ministry, said the existing equivalence regime is already being adapted to reflect Brexit by increasing supervision of foreign clearing houses.

“Expanding equivalence regimes to other areas, for example on banking, however, seems less likely in the short term, since this would touch fundamental questions of EU supervision of these regulated activities on the one hand and national preferences of member states on the other,” Holle told Eurofi magazine.

France, Germany and other EU states are competing to attract financial firms from Britain.

Holle said the EU could take key equivalence decisions regarding Britain by the end of 2020, the end of a planned “standstill” transition period during which Britain would continue to abide by EU rules.

Christopher Giancarlo, head of the U.S. Commodity Futures Trading Commission (CFTC) told Eurofi that the EU plans for tighter supervision of foreign clearing houses needed amending.

Unless EU regulators “defer” to the CFTC over U.S. clearing houses, America’s futures markets will face harm, he said.

“It should not be a surprise that the United States will not tolerate such disruption,” Giancarlo said.

The draft EU law should be amended to accept how U.S. clearing houses are currently supervised, and to limit the law’s application to EU clearing activity or euro-denominated clearing, Giancarlo said.

Brussels has said the draft law is focused on supervising clearers like LCH (LSE.L) in London after Brexit, as it clears the bulk of euro-denominated derivatives globally.